Imagining Our Future Postal System

What should the U.S. postal system look like in 2030 to serve the needs of the American public and those who use the system?

That big question kicked off the “Imagine” panel discussion at the recent PostalVision annual event held in the Washington, DC area. The discussion could not have been more timely – President Trump just before the event had tweeted about the U.S. Postal Service and its relationship with Amazon, and shortly after the event and Imagine session, the President signed an Executive Order establishing a Task Force to review and make recommendations around the postal system. The Task Force has 120 days to conduct its review and provide recommendations to the Administration.

The Imagine panel was moderated by the Hon. Dan Blair, senior counselor for the BiPartisan Policy Center, who has a long history with working on postal issues, both in prior roles in the House and Senate as well as serving as Chair of the Postal Regulatory Commission (PRC) from 2006-2009, which was a pivotal period for the USPS as the Postal Accountability and Enhancement Act (PAEA) had just been passed by Congress. The panelists included Brody Buhler, Global Managing Director, Post and Parcel industry, Accenture; Jim Campbell, James Campbell Associates; Elmar Toime, Chairman, Postea Group; Lori Rectanus, Director Physical Infrastructure, Government Accountability Office (GAO); and Jeff Jarvis, BuzzMachine.

When it comes to Postal Systems, the U.S. is one of the few industrialized countries that has not modernized.

Buhler told the PostalVision audience that through Accenture’s history of research and work with postal organizations worldwide, they see very consistent discussions occurring with nearly all posts in industrialized countries. Mail volumes are declining, parcel volumes are increasing as ecommerce grows, and posts are needing to reinvent themselves.

Toime, who has served on five boards for posts around the world, said he has seen much transformation and change, and has followed the U.S. postal system for some time. He noted that the U.S. is one of few countries left where the post does not offer financial services to consumers, which in other countries are sustaining the whole post. Just selling stamps and postal services at post offices is a minority approach in today’s global posts, he said.

Campbell, who has a long and diverse background working both in the Senate and later with DHL, has worked with many government agencies on the development of legislative policy and is familiar with the postal laws in most developed countries. “If you look around the world, there are many great national postal systems that serve their populations and they are all having the same problem,” Campbell said, “which is that in the last 20-30 years, the posts have not adapted well to new technologies and new market demands.”

“21 out of 24 posts have fundamentally revised their laws to give their postal systems more freedom and flexibility to adapt to new markets,” Campbell said, noting that most have corporatized and some have privatized, giving the posts commercial freedom to get into new businesses and inject incentives. “The United States is one of three countries that has not tackled this problem,” he told the PostalVision audience. “I don’t see another way to design the U.S. postal system for the future without going down the same path these other countries have done,” he said.

With the rapid and accelerating pace of changing technology and consumer demands, what does the U.S. postal system need to look like in 2030?

Buhler said the key to answering that vision question is to find where the value lies. “Anything that can be digital will be,” he noted, “but people will still need to have things delivered and will want that service faster and more convenient than ever before.” He said there is value in mail, and some things can’t or won’t convert to digital.

Rectanus, whose GAO portfolio includes postal, federal and real property management, said that even though the U.S. Postal Service does not receive federal tax dollars, Congress is very interested in it and the GAO has a body of work on the USPS, having put the agency on their High Risk list for many years because of its unsustainable business model. She said that the postal system of the future should be designed around what customers want and do not want, which will drive the rest. She said businesses should do what they do best, with the private sector taking on pieces of the postal business they are good at and the USPS taking what others don’t want. “From an auditor’s hat,” Rectanus said, “we would like to see clear agreement on whether a federal role is needed in a postal system, what that should be, how to create that structure so its purpose is clear with performance metrics, and fund it so it can carry out its mission.”

Jarvis, a noted author (“What Would Google Do?” and other books) with an extensive journalism and entrepreneurial background, comes from a different but somewhat related industry. Jarvis had presented at a prior PostalVision event a few years ago on the topic of what a Google-y postal system would look like. He said many changes are coming at both the media and postal industries, but both have much innovation in their sectors as well. Jarvis said the USPS can have a valuable role in identity authentication given all the recent issues with data privacy and authenticating news.

Toime noted that in other countries, posts have diversified, but in the U.S. the post can’t do much by law, which makes it atypical in that regard. He said that the postal system is at heart a logistics system, and that is how the U.S. needs to think of it.

Buhler said Accenture’s research has found that logistics diversification is a strategy that is working for the “Top 10” posts, with 8 having diversified into logistics to produce better financial outcomes. “Adjacency is a great opportunity for posts,” he said. He said the USPS and other posts are some of the best logistics operators in the world and, if given the freedom, there would not be a crisis.

Buhler said the USPS needs commercial governance, market freedom and infrastructure agility. “In this marketplace, at this pace of change for both consumer expectations and technology,” he said, “we can’t spend 14 months deliberating, we have to be faster and allow them to move at the pace they need to.”

Campbell said the honest answer to the question of what we want the postal system to look like in 2030 is “we don’t know,” because the markets for communications and delivery services are changing so quickly and radically. “The only answer we know is that the USPS needs more flexibility to face these challenges,” he said.

What do millennials want from a postal system?

What millennials – and the generations that follow millennials – want from the U.S. postal system is a topic discussed by the panel and at many other venues in the postal ecosystem. With the variety of viewpoints – even from millennials themselves – it is a topic that definitely needs more study and consideration.

Audience members, sharing anecdotes from their millennial children’s experience and viewpoints on mail and parcels, implied that most young people do not see value in hardcopy mail and even email is being less used by younger generations. Some in the audience said it is hard to get millennials and other young people to think about what they want from a postal system beyond the ability to receive parcels.

Yet as the younger generations grow and reach age of financial independence and encounter the world of mortgages, loans, credit cards and other financial and legal transactions, as well as becoming more versed in ecommerce as they become gainfully employed and flex their buying power, their needs from a postal system may change.

Posing the question to two millennials attending the PostalVision event from Carnegie Mellon, the responses surprised some in the audience. “We still see a high value in the postal system and the importance of having a system that delivers to every home in every corner of the country,” one said. “That is valuable to the community as a hub to come together to get information,” she told the PostalVision audience. Another Carnegie student said the greatest USPS asset is not just its fleet and facilities, but the direct interaction with U.S. citizens. There may be valued services the USPS can provide beyond its delivery operations that help promote social good and improve communities, he said.

How do we drive change to design a postal system for the future?

Campbell noted that other countries have faced the same lack of political consensus and difficult issues around the posts that the U.S. needs to face, and they also wanted the status quo to continue. “It can be done,” he said of restructuring the U.S. postal system, “we need to study what other countries have done, figure out what kind of delivery system infrastructure we need in the U.S., then determine what role the USPS plays.”

Rectanus said that sometimes it is hard for Congress and others to understand the “crisis” happening in the U.S. with its postal system because mail is still being delivered, vehicles are still operating, and the USPS is implementing new programs like Informed Delivery. “The USPS has done an amazing job considering how much its hands are tied,” she said. Rectanus said that many of the concerns raised around what could happen if things are changed are happening anyway, such as volume declines. “If we do nothing, the very thing we fear will happen if we do something, is happening already,” she said.

Jarvis said there is opportunity in looking at the future of the postal system not just for product change but for structure change, and it may be time to push more private partnership opportunities, freeing up segments of the field for innovation, investment, and the ability to change.

Buhler said that looking at other posts and Accenture’s research, the most regulated and constrained posts are struggling the most. “Those who operate commercially operate from a different paradigm,” he said, “they look for opportunities and are very successful.”

Blair concluded the session with three observations from the discussion. “As we move toward 2030, paper will become a premium product,” he said, because prices will rise and the cost of subscriptions to hardcopy news and the link will rise. “The USPS needs to leverage its most important asset of household delivery as the basis of what policy makers look at, but also policy makers need the capacity to properly consider the future,” he said, noting that Congressional staff ratios have dropped and more support from private groups is needed to help study issues. Lastly, he said, we are laboring today under a government infrastructure that represents the best thinking of the 20th century, and we need to change that paradigm to think about what it needs to be tomorrow.